ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, November 23, 1996 TAG: 9611250139
SECTION: BUSINESS PAGE: A-8 EDITION: METRO
DATELINE: FALLS CHURCH
SOURCE: Associated Press
What could be more American than this: Down the aisles of Toys 'R' Us comes Karen Barnes, suburban mother of two, intent on her holiday shopping.
What could be more Chinese than this: Her shopping cart is piled high with stuffed puppy dogs, a Batman doll and the biggest catch of all, a Great Adventures Pirate Ship, the latest thing for the toddler set. And all the colorful packages bear in tiny letters these words: ``Made in China.''
Barnes was astonished to hear it. ``It looks like I don't have anything not made in China,'' she said. But she quickly added, ``You've got to go for what they see on TV and what their friends have.''
Across America this holiday season, shoppers will stroll past floor-to-ceiling shelves jammed with Mattel's 101Dalmatians Basket O'Puppies, the Playtime Pony from Fisher-Price and the ever-popular Ken and Barbie dolls - all Chinese imports.
Fact is, three out of four toys sold in America are foreign-made and 60 percent of those imports come from China.
And it's not just kids' stuff. The situation is even more lopsided at the shoe store - 60 percent of all shoes sold in America come from China.
In a startling change, perhaps as early as next year, China will firmly dislodge Japan as the country giving America its biggest trade deficits.
The 1996 deficit with Japan was still higher through September. But in three months this year the deficit with China was higher, the first time that has happened.
The long-term change, analysts believe, will mean less White House emphasis on Japanese trade barriers and more attention focused on breaking into the huge Chinese market of 1.2 billion people.
``China will become the top priority in the president's second term,'' said C. Fred Bergsten, head of the Institute for International Economics. He calls China ``the most difficult but most important issue facing the world economy.''
When President Clinton meets Sunday in the Philippines with Chinese President Jiang Zemin, officials say trade will be a priority along with foreign policy issues such as human rights, Taiwan and nuclear proliferation.
After their meeting, the men are expected to announce an acceleration of talks concerning China's application to become a member of the World Trade Organization.
China has been trying for more than two years to join the WTO, the Geneva group that sets the rules for global trade. The United States has blocked the effort, saying that China has done far too little to meet WTO requirements of dismantling trade barriers.
It is just those barriers that U.S. officials blame for America's poor showing in exporting to China.
Through the first nine months of this year, imports to the United States of all goods from China were up 10 percent over the same period a year ago, to $37.2 billion. During the same period, sales of American products to China were down 2.5 percent to $8.2 billion.
The difference between those two figures, the trade deficit, is $29 billion so far this year, up 14 percent from last year. In contrast, the U.S.-Japan deficit was $34.1billion through September, 27 percent lower than last year.
``We have made some progress in opening markets in China but we have a long way to go,'' said Commerce Secretary Mickey Kantor. ``We want a level playing field. If we had that situation, we would be doing very well with China.''
U.S. officials say the Clinton administration won't drop its insistence that China's membership in the World Trade Organization be on a ``commercially acceptable basis.''
But what that term means is open to debate.
Brookings Institution scholar Nicholas Lardy contends that China's high trade barriers protect inefficient, state-run companies that employ two-thirds of urban workers. China might decide the pain of ending that wouldn't be worth the smaller gains of joining the WTO.
Yet Greg Mastel of Washington's Economic Strategy Institute insists that if the administration relents, it will lose a critical opportunity to reform an economy that sometime early next century will pass the U.S. to become the world's biggest.
AMERICA'S APPETITE FOR IMPORTS
Major imports from China and Japan for the first nine months of 1996.
CHINA
* Toys, electronic games, Christmas decorations and miscellaneous items: $8.5 billion.
* Shoes, $4.8 billion.
* Clothing, $4.7 billion.
* Telephones and other telecommunications equipment, $3.1 billion.
* Household appliances, televisions and computer chips, $2.7 billion.
* Computers and office equipment, $2.5 billion.
Total, January through September, $37.2 billion.
JAPAN
* Autos, $20.6 billion.
* Household appliances, televisions and computer chips, $12.6 billion.
* Computers and office equipment, $12.3 billion.
* Telephones and other telecommunications equipment, $5.6 billion.
* Auto engines, jet engines and electric motors, $4.7 billion.
* Industrial machinery, $3.9 billion.
Total, January through September, $85.1 billion.
LENGTH: Long : 102 lines ILLUSTRATION: GRAPHIC: Chart by AP. KEYWORDS: 2DAby CNB